Analysts Cut Xilinx Estimates After Chipmaker Lowers Guidance - TheStreet

A handful of analysts lowered their estimates and offered some harsh commentary for


(XLNX) - Get Report

, a day after the company

lowered its revenue guidance -- just three weeks after

the chipmaker said that it would hit its earlier targets.

Dan Niles of

Lehman Brothers

cut his earnings estimates on Xilinx for the first quarter of fiscal 2002 to 8 cents a share from 16 cents, and lowered his projection for the full year to 45 cents a share from 76 cents. "We stated

on June 4, when Xilinx confirmed revenue forecasts that they were tracking to the low end of guidance and that June would be a challenge given 40% of revs still needed to be done. Yesterday reality set in with revs now expected to be down 32% q/q," Niles wrote in a research note.

Niles capped off his note by writing: "For investors waiting for a rev rebound, it better come soon because a P/E of 97x FY02 doesn't leave much room for error."

Goldman Sachs

analyst Terry Ragsdale also chopped his earnings estimates on Xilinx in a note titled, "Can you say 'yet another comms casualty'? Sure you can." The analyst lowered his 2001 earnings estimate for Xilinx to 19 cents a share from 67 cents and took his 2002 expectation to 32 cents from 78 cents. He rates the stock a market outperformer.

"We are cutting EPS estimates hideously yet again, but let's face it: We have no idea what 2002 and beyond should look like," Ragsdale wrote in a research note. "Comms demand remains anemic, and inventory remains a problem throughout the supply chain."

Niles also lowered his expectation for


(ALTR) - Get Report

, a competitor of Xilinx. The analyst now expects revenue for both companies to decline 5% to 6% in the September quarter. The analyst cut Altera's second-quarter earnings estimates to 8 cents a share from 9 cents, and dropped his expectation for fiscal 2001 to 40 cents a share from 45 cents. Niles also lowered his EPS forecast for the next fiscal year to 50 cents from 60 cents.

"We would avoid these stocks until there is clear evidence of a positive change in demand," Niles wrote, but he did maintain his market perform ratings on both Xilinx and Altera.

Prudential Securities

analyst Hans Mosesmann revised his estimates and price targets on Xilinx, Altera and

Lattice Semiconductor

(LSCC) - Get Report

, but said that he believes the shares of each company have already discounted most of the bad news. He maintained his buy ratings on all three stocks.

Shares of Xilinx traded down 5.4% to $41.51 in morning

Nasdaq activity. Altera was down 2.9% to $26.23.